Langton Capital – 2021-04-07 – Saga, vaccine passports, outdoor trading, staycations, traffic lights etc.:
Saga, vaccine passports, outdoor trading, staycations, traffic lights etc.:
A DAY IN THE LIFE:
Film cannisters, you remember them?
Not the massive, pancake-sized ones swanning around the Hollywood studios but rather the small ones that housed the 35mm film for our cameras back when Adam was a lad?
Well, I use the few I’ve still got lying around for housing drawing pins, washers, nuts and bolts etc. and useful they are too but I’ve got no idea how old they are and, on a whim, I asked junior Brumby no.3 and junior Brumby no.5 if they knew what they were.
No.3 did but no.5 didn’t, suggesting that they were maybe what Tic-Tac sweets used to come in, implying that the items in question might be 20-25yrs old.
And that kind of fits the facts as I can’t remember buying film since we came back to the UK in 2002. I’ll try a floppy disc next, then maybe a cassette tape.
Anyway, there are still a lot of out-of-office replies coming back suggesting either that holidays are being extended or some of this email’s recipients are as good at taking the auto-responses off as I am. On to the news:
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PUBS & RESTAURANTS:
Passports, passports, passports:
• The idea, which was reportedly being discussed in Downing Street in December, has been hoisted up the flagpole and there will be a political judgement at some point as to whether enough people have saluted it.
• Pro- and anti- arguments in brief
• The arguments on the pro-side are that consumers ‘seem to be in favour’, that confidence would be enhanced, that social distancing could be scrapped (in vetted venues), that the economy could reopen more rapidly & that some tangible benefit could be derived from the rapid vaccine rollout.
• The anti- arguments focus on civil liberties and intrusion alongside practical arguments such as the expense (both in-venue and to the taxpayer), the suggestion that operators could be ‘blamed’ for all of the above and the feeling that it might disadvantage the young, put some people off visiting the on-trade and, given the power of inertia, enhance the draw of the sofa, the BBQ or the park bench.
• It is clearly too late to do anything for next Monday. And 17 May looks unlikely. But we may have a further update (through leaks in the press and/or) on 12 April.
• Langton comment: See premium email.
Outdoor opening next Monday:
• Grosvenor Estates says ‘Grosvenor Britain & Ireland is bringing new al-fresco dining to the West End in time for re-opening. From 12 April, over 800 outdoor dining places will be in place in popular dining destinations and public spaces across Mayfair and Belgravia’. For those picking up a takeaway, it says ‘Grosvenor Square will play host to new seating for 150 people and picnic areas providing visitors with a safe and inviting green space to enjoy their meals.’
Staycations: Keeping would-be customers in the UK…
• Further comment on overseas travel is due next Monday. See also Travel & Leisure below. We believe a strong summer in the UK is almost certain. Capacity could be the issue and day trips, for many, could be the order of the day.
• Langton comment: One Brumby studied bio-genetics at Uni and though he isn’t an out-and-out expert, he does know more about the subject of variants and genetic mutations than I do.
• He says variants prosper when there are a) large numbers of case (think South Africa or Brazil) and b) where selective pressure is put on the virus. So, if people are vaccinated in large numbers against a standard variant, they will select a virus for transmission that evades the vaccine (such as the South African variant). This mitigates against travel, even for those who have been vaccinated (against standard variants).
• If the UK – but also the world as a whole – can reduce the number of cases via vaccination, then the number of mutations will be reduced. Consider strangling a snake that is also trying to strangle you. It’s a situation where it is important to get the timing right and it must (surely) mitigate against a wholescale reopening of travel in the short term.
• One way around this, of course, would be to introduce the traffic lights, as flagged, but to leave all the lights at red.
Working from Home:
• Goldman Sachs ‘is preparing for hundreds more staff to go back to its London office this week’ reports the BBC. The Beeb also suggests that some tech giants are moving towards recalling staff. It says that Google is ‘bringing forward its timetable of moving people back into the office.’ It says ‘as of 1 September…employees wishing to work from home for more than 14 days would have to apply to do so.’ Incite, meanwhile, reports that ‘58% of people can’t see the way they do their jobs returning to pre-pandemic norms.’
Company and other news:
• Marston’s has this morning updated on its financial covenant waivers and reopening plans following the recent Government announcements. The group says that it ‘can now confirm that it has secured waivers and amendments to its Bank, Private Placement and Securitised facilities for the financial periods up to and including 1 January 2022.’ The company adds ‘within the securitisation, Marston’s had strong support from bondholders who have approved waivers for the two-quarter tests to 2 October 2021 and the four-quarter test to 1 January 2022. The Group’s banks and private placement have approved the adoption of liquidity and quarterly profit covenants to 1 January 2022.’ Given the above and the fact that the company secured a significant boost to its cash resources via its Carlsberg JV deal last year, this represents further evidence that the company will not be needing to tap the equity
• Marston’s says ‘this collaborative approach was helped by open and constructive dialogue in a period of great uncertainty and underlines the importance of good, long-term relationships with all our stakeholders.’ Regarding its reopening plans, Marston’s says it ‘expects to reopen around 70% (c.700) of its managed and franchised pubs in England with outdoor spaces on or around 12 April and, subject to final regulatory confirmation, the majority of our Scottish and Welsh pubs on 26 April.’ The group says ‘on the basis that the stated reopening roadmap set out by the Government is adhered to, the remaining managed estate in England should open on or around 17 May with restricted indoor trading, and we are assuming a return to normal trading conditions from 21 June.’
• Solicitor Philip Ross points out that ‘new pre-pack regulations will come into force on 30 April 2021 after being approved by Parliament on 23 March 2021.’
• A survey by accountancy firm BDO has found that three quarters of medium-sized companies believe 2021 is now the year to invest (per The Telegraph).
HOTELS & LEISURE TRAVEL:
• The Travel Trade Gazette reports PM Boris Johnson as saying that he has not given up on allowing overseas travel from 17 May.
• Johan Lundgren, CEO of easyJet, has told Sky that foreign holidays may become the preserve of the rich. He says that a traffic light system could pile on costs for travellers.
• The CAA has said that only 554 of the 742 ATOL licenses due to expire on 31 March have been renewed.
• STR reports Las Vegas hoteliers have begun, once again, to add capacity.
• NCL aims to resume cruise sailings in Europe and the Caribbean this summer for vaccinated guests. Viking has added two UK cruises in June to its programme and has announced plans to run limited operations in Bermuda and Iceland. The company says ‘we applaud the governments of the United Kingdom, Bermuda and Iceland for their collaboration and support in restarting the cruise industry safely.’
• Pragma Consulting suggests that airports could look to diversify their income streams in light of the 60% drop in flight volumes. Nothing could be done in the short term, but it suggests that some office or mixed use space may be offered. It’s not clear if these occupants would be able to pay the same rental charges as existing tenants.
• See Pubs & Restaurants for coverage of staycations & vaccine passports. See premium email for news on Saga. News from Carnival later in the day.
• GameStop, which has seen its shares rally by 900% on support from Reddit readers, has said that it will issue up to 3.5m shares to raise up to $1bn.
• The Guardian reports that, after a sharp rise in internet betting due to the pandemic, there has been a ‘rise in the number of gamblers trying to block themselves from using online casinos and bookmakers.’
FINANCE & MARKETS:
• The IMF has raised its estimate for UK and world growth this year and next. The UK economy is predicted to return to its pre-pandemic level of activity in late 2022.
RETAIL WITH NICK BUBB:
• Nick is taking a well-earned break and is back on 12 April.
TRADING STATEMENTS & EVENTS:
Upcoming results are set out below:
• 29 Mar 21 Ten Entertainment FY numbers
• 29 Mar 21 Brighton Pier Group H1 numbers
• 30 Mar 21 AG Barr FY numbers
• 30 Mar 21 Time Out H1 numbers
• 31 Mar 21 Various Eateries AGM
• 1 Apr 21 Sportech FY numbers
• 7 Apr 21 Saga FY numbers
• 7 Apr 21 Carnival Q1 update
• 8 Apr 21 Sportech FY numbers
• 8 Apr 21 Constellation Brands FY numbers
• Est. 9 Apr 21 Barclaycard Consumer Spending (March)
• 13 Apr 21 Just Eat Q1 numbers
• 15 Apr 21 Deliveroo Q1 numbers
• 15 Apr 21 Pepsi Q1 numbers
• 15 Apr 21 Naked Wines FY trading update
• 15 Apr 21 Heavitree Brewery AGM
• 22 Apr 21 Domino’s Pizza PLC AGM
• 23 Apr 21 Gear4Music results
• 28 Apr 21 Carlsberg Q1 numbers
• 28 Apr 21 YUM Brands Q1 results
• 29 Apr 21 Molson Coors Q1 numbers
• 30 Apr 21 Safestay General Meeting
• 4 May 21 Campari Q1 numbers
• 6 May 21 Bank of England MPC meeting
• 7 May 21 Intercontinental Hotels Q1 numbers
• Est 9 May 21 Barclaycard Consumer Spending (Apr)
• 12 May 21 Compass Group H1 numbers
• 12 May 21 Stock Spirits H1 numbers
• 12 May 21 TUI H1 numbers
• 12 May 21 Just Eat AGM
• 18 May 21 Britvic H1 numbers
• Est 19 May 21 Marston’s H1 numbers
• 26 May 21 C&C FY numbers
• 24 Jun 21 Bank of England MPC meeting
• 27 Jul 21 Campari H1 numbers
• 5 Aug 21 Bank of England MPC meeting
• 10 Aug 21 Intercontinental Hotels H1 numbers
• 12 Aug 21 TUI Q3 numbers
• 18 Aug 21 Carlsberg H1 numbers
• 22 Oct 21 Intercontinental Hotels Q3 numbers
• 26 Oct 21 Campari Q3 numbers
• 8 Dec 21 TUI FY numbers
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